But the project - once opposed by Washington but no longer - has become more a symbol of an evolving security trans-Atlantic security relationship than of an emboldened EU trying to emerge from the American security umbrella.

The Airbus A400M airlifter project was launched in the 1990s in the wake of the violent breakup of the former Yugoslavia - when the EU came to the humiliating realization that it could not dispatch peacekeepers to a region right on their own doorstep without American assistance.

The transport plane was a key component in a sweeping plan called the European Security and Defense policy aimed at integrating Europe's fragmented defense industries and defense programs.

At the time, the Clinton administration fiercely criticized the strategy, calling it wasteful duplication - since the U.S. had similar weapons systems in place. Then Secretary of State Madeleine Albright even warned of the potential "decoupling" of Europe and the U.S. if Brussels continued to divert resources from NATO to its own security projects.

Since then, Washington and European powers like France and Germany have clashed even more fiercely over the war in Iraq. But there appears to be a more powerful dynamic at play: the war on terror has nurtured a new pragmatism between the United States and Europe in confronting common threats such as terrorists in Afghanistan and rogue states like North Korea and Iran.

It appears to be for this reason that the Bush administration has toned down warnings of a trans-Atlantic rift over European plans to build the plane, taking the view that the more military hardware Western allies possess collectively the better.

The most prominent example of U.S.-European cooperation is Afghanistan, where the EU now accounts for nearly half of the 35,000 allied troops and has expressed a firm commitment to see the job through. Poland and the Czech Republic have also expressed willingness to host a U.S. anti-ballistic missile shield.

"The dynamic has been transformed in the last few years," said a diplomat at NATO who declined to be identified because of the sensitivity of the issue. "Relations (with the EU) are no longer adversarial since the start of operations in Afghanistan."

Another NATO official, who also declined to be identified, noted that since 80 percent of the membership of the alliance and EU now coincide, additional capabilities such as the A400M will prove useful for both organizations.

The Europeans, too, dismiss the notion of any rivalry with the United States.

"Our activities are complementary, and if Europeans do manage to raise their game on defense, it seems to me to matter not a jot whether this is done on a NATO or an EU ticket," said Nick Whitney, head of the European Defense Agency.

"Everybody knows that if Europeans want to preserve effective military clout ... they have no choice but to cooperate."

The rhetoric was not always so amicable. When the $24 billion project was launched in 1995, the EU said the aim was to "to develop an autonomous capability ... to conduct EU-led military operations in response to international crises."

The new aircraft - the first military plane produced by Europe's Airbus consortium - resembles a scaled-up C-130 Hercules. The prototype is scheduled to take to the sky in less than a year, and about 200 will enter service in eight European air forces beginning in 2009.

The EU says the Airbus will offer much greater range and nearly twice the payload of the Hercules, thus allowing the Europeans to quickly deploy forces to faraway theaters such as Central Africa, the Middle East, or Central Asia.

On the whole, however, the European experience with collaborative industrial projects of this nature has not been a happy one.

The Eurofighter Typhoon soon to enter service after 23 years of development was dogged by prolonged delays and cost overruns that nearly tripled the project's price to about $40 billion. Another big-ticket item, the Eurocopter Tiger gunship also spent two decades in development, reports AP.

Combined European budgets for new weapons systems - estimated at about $30 billion - are still dwarfed by the $79 billion the Pentagon spends on procurement annually with a further $70 billion devoted to research and development.

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